End of Day Wrap-Up

Headline

Gilt Markets Take a Breather: 1Y Yield Dips 2bps Amid Mixed Economic Signals

Gilt Market Analysis

Today, the gilt market experienced notable movements, particularly in the shorter tenors. The 1Y yield decreased by 2bps to 3.566%, while the 2Y yield remained unchanged at 3.722%. The longer tenors saw slight increases, with the 10Y yield up 1bp to 4.526% and the 15Y yield up 2bps to 4.932%. This volatility can be linked to today’s economic data releases, particularly the GBP Mortgage Approvals which came in lower than expected, indicating potential cooling in the housing market. Overall, market sentiment appears to be risk-off as investors digest these mixed signals.

PWLB Reset Predictions

• 1Y: predicted 4.57% (0bp from current)
• 5Y: predicted 5.01% (1bp from current)
• 10Y: predicted 5.60% (2bp from current)
• 20Y: predicted 6.15% (2bp from current)
• 30Y: predicted 6.25% (2bp from current)
• 50Y: predicted 6.01% (1bp from current)

Context

The predictions are driven by the recent movements in gilt yields, particularly the modest increases in the longer tenors, which reflect a cautious outlook among investors. The mixed economic data, especially the lower-than-expected mortgage approvals, suggests a potential slowdown in consumer activity, further influencing the PWLB rates.

Calendar Events

TODAY’S RELEASES:

• GBP Mortgage Approvals - Actual: 61.01k (Forecast: 64.40k, Previous: 64.07k) - 09:30 release showed a decline in approvals, impacting gilt movements.
• GBP Net Lending to Individuals MoM - Actual: 6.10B (Forecast: 4.20B, Previous: 6.70B) - This higher figure may have provided some support to market sentiment.

TOMORROW:

• Tomorrow 09:30: GBP Nationwide Housing Prices MoM – Forecast: 0.6%

THIS WEEK AHEAD:

• Monday 2026-02-02: GBP Nationwide Housing Prices YoY – 09:30 – Forecast: 1.5%
• Monday 2026-02-02: GBP S&P Global Manufacturing PMI Final – 09:30 – Forecast: 51.6
• Tuesday 2026-02-03: GBP Treasury Gilt 2035 Auction – Time TBD – Previous: 4.61%

This commentary is provided for informational purposes only and should not be construed as financial advice. Market conditions can change rapidly, and you should always verify current rates directly with the PWLB or through official channels before making borrowing decisions. Past performance is not indicative of future results.

Until next time, keep your treasury strategies sharp and your rates sharper!